You’ve made the decision to buy a franchise business. You’ve done your homework, made comparisons, and finally submitted a qualification form for a call back from the franchise business opportunity you’re most interested in. This phone call is a critical step in the process that will ultimately determine if you buy this franchise. Home Franchise Concepts (HFC) has been interviewing prospective franchise owners for over 25 years and offers some sage advice to prepare for your franchise interview—four questions to ask and four questions to be ready to answer.
Realize it’s a two-way street
As a franchise business owner, you enter into a legal and commercial relationship with the franchisor, being licensed to use the franchisor’s brand name and operating systems. They maintain the authority to protect the integrity of the brand, building a network of like-minded franchise owners. Franchisors are looking for motivated, financially qualified professionals who will integrate with the franchise network and proudly help them build and represent the brand while building an independent business.
While the franchise interview is a time for the franchisor to evaluate you as a viable candidate, it’s also your opportunity to determine if this franchise organization will enable you to reach your goals and fulfill your ambitions. It’s your chance to more closely evaluate the company values and the franchise opportunity, with either side having the power of “no” if it doesn’t feel like a good fit.
Four questions you should ask the franchisor
Question One: What is my earning potential?
Obviously, this is a top priority. You don’t want to buy into a franchise system that will not allow you to make the kind of income you anticipate. No franchisor will give you a guarantee of income, but you need to know that there is the possibility for growth that can meet your needs. Along with this comes secondary questions that relate to what you can earn:
- What are expenses and property requirements?
- How are marketing fees and royalty fees assessed and paid?
- When can you realistically expect to see profitability?
Question Two: Is this system compatible with my business and personal goals?
You undoubtedly have ideas about how you want to run and manage your own business, so you want to find out whether or not this franchise business model will allow the freedom and support you need. Be prepared to honestly discuss your dreams and goals as well as an exit strategy.
- Available territories.
- What is the timetable to be able to open for business?
- Will they provide any assistance when you decided to sell the business?
Question Three: What is the training and support structure at the beginning and ongoing?
Becoming a first-time business owner or stepping into a new industry will have a sharp learning curve and you need to know exactly the types of training and support you will receive from the franchisor.
- What is involved with initial training and startup?
- Do they offer help with financing, securing equipment, warehouse, etc.
- Is there business systems support for the duration of the franchise contract?
Question Four: What is the company culture?
Finding out the corporate values will let you know if this is an organization you can wholeheartedly give yourself to.
- How do they value their franchisees and treat their customers?
- How are disagreements or disputes resolved?
- Do franchisees have a voice through a Franchise Advisory Committee?
Four questions the franchisor will ask you
Question One: Why do you consider us a good fit?
Since you’ve made the choice to pursue this specific franchise, what your reasons are for choosing them will be important. They will need to know that you understand the expectations of the business model and the roles and responsibilities of both franchisor and franchisee.
Question Two: What is your business background?
They’ll want to know about any previous experience as a franchise owner and if it was a good or bad experience for you. Additionally, do you have experience in this industry with management or leadership and team building? Your comfort level with building a customer base, i.e., sales and marketing, will need to be explored, especially if it’s a problem for you. Will you bring on a sales or marketing manager?
Question Three: How will you finance your franchise business?
Buying a franchise business is an investment with profitability a future prospect, so they’ll want to know that you can financially survive as you build your new business. Transparency is vital, and certain financial conditions must be met to qualify to purchase a franchise so having all your information current and available will advance the decision making.
Question Four: What are your long-term business goals and exit strategy?
Where do you want to be in five, ten, or twenty years? Are you building a legacy business to pass on to your children or planning to sell your business to fund your retirement? Having the endgame defined will be a big part of your overall business strategy.
The right decision is a win/win
The franchisor/franchisee relationship is interdependent, with both parties relying on each other for success. The franchisor has an obligation to do what’s best for the brand and existing franchisees by awarding franchises to candidates who will produce a successful result as part of the franchise network and in their own business. The franchise interview is the opportunity for evaluation on both sides to determine whether or not this relationship would be mutually beneficial.
If you’re facing your franchise interview, know that it’s an exciting opportunity to “seal the deal” or open the way for a different direction. Buying a franchise is a big decision and it’s not one you have to make alone. Take a proactive stance and work with a franchise advisor who is dedicated to helping you make the right decision that will advance your career and life goals. Go online to Home Franchise Concepts or call 1-800-420-5374 to speak with one of our Franchise Licensing Advisors and begin investigating the business of franchising with HFC. Or go directly to Franchise Opportunities to learn more about each of our brands: Budget Blinds®, Tailored Living®, Concrete Craft® and AdvantaClean®.